☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2020

or

☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from _____ to _____

Commission File No. 0-09115

____________________________________________________________

MATTHEWS INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________________________________

Pennsylvania

25-0644320

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Two Northshore Center, Pittsburgh, PA15212-5851

(Address of principal executive offices) (Zip Code)

(412) 442-8200

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, $1.00 par value

MATW

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yesý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

ý

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐No ý

As of March 31, 2020, shares of common stock outstanding were: Class A Common Stock 31,269,345 shares.

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollar amounts in thousands)

March 31, 2020

September 30, 2019

ASSETS

Current assets:

Cash and cash equivalents

$

72,338

$

35,302

Accounts receivable, net

294,587

318,756

Inventories, net

186,919

180,274

Other current assets

72,093

49,384

Total current assets

625,937

583,716

Investments

93,208

85,501

Property, plant and equipment, net

235,962

237,442

Deferred income taxes

4,940

5,032

Other assets

117,005

31,455

Goodwill

750,578

846,807

Other intangible assets, net

364,106

400,650

Total assets

$

2,191,736

$

2,190,603

LIABILITIES

Current liabilities:

Long-term debt, current maturities

$

26,077

$

42,503

Trade accounts payable

89,650

74,558

Accrued compensation

39,077

42,545

Accrued income taxes

1,894

5,997

Other current liabilities

165,604

114,276

Total current liabilities

322,302

279,879

Long-term debt

939,753

898,194

Accrued pension

137,284

133,762

Postretirement benefits

19,926

19,963

Deferred income taxes

92,832

102,482

Other liabilities

88,437

37,087

Total liabilities

1,600,534

1,471,367

SHAREHOLDERS' EQUITY

Shareholders' equity-Matthews:

Common stock

$

36,334

$

36,334

Additional paid-in capital

143,034

137,774

Retained earnings

862,581

972,594

Accumulated other comprehensive loss

(248,495)

(228,361)

Treasury stock, at cost

(203,307)

(200,235)

Total shareholders' equity-Matthews

590,147

718,106

Noncontrolling interests

1,055

1,130

Total shareholders' equity

591,202

719,236

Total liabilities and shareholders' equity

$

2,191,736

$

2,190,603

The accompanying notes are an integral part of these consolidated financial statements.

2

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollar amounts in thousands, except per share data)

Three Months EndedMarch 31,

Six Months EndedMarch 31,

2020

2019

2020

2019

Sales

$

374,800

$

391,400

$

739,744

$

765,577

Cost of sales

(250,036)

(255,119)

(499,253)

(502,885)

Gross profit

124,764

136,281

240,491

262,692

Selling expense

(33,182)

(34,352)

(65,445)

(69,381)

Administrative expense

(68,399)

(68,156)

(138,864)

(135,259)

Intangible amortization

(17,872)

(9,509)

(35,814)

(17,622)

Goodwill write-down

(90,408)

—

(90,408)

—

Operating (loss) profit

(85,097)

24,264

(90,040)

40,430

Investment (loss) income

(1,108)

2,091

191

739

Interest expense

(9,613)

(10,259)

(18,853)

(20,560)

Other deductions, net

(1,843)

(1,067)

(4,662)

(1,991)

(Loss) income before income taxes

(97,661)

15,029

(113,364)

18,618

Income tax benefit (provision)

11,066

165

16,463

(440)

Net (loss) income

(86,595)

15,194

(96,901)

18,178

Net losses attributable to noncontrolling interests

231

223

71

336

Net (loss) income attributable to Matthews shareholders

$

(86,364)

$

15,417

$

(96,830)

$

18,514

(Loss) earnings per share attributable to Matthews shareholders:

Basic

$

(2.77)

$

0.49

$

(3.11)

$

0.59

Diluted

$

(2.77)

$

0.48

$

(3.11)

$

0.58

The accompanying notes are an integral part of these consolidated financial statements.

3

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Dollar amounts in thousands)

Three Months Ended March 31,

Matthews

Noncontrolling Interest

Total

2020

2019

2020

2019

2020

2019

Net (loss) income:

$

(86,364)

$

15,417

$

(231)

$

(223)

$

(86,595)

$

15,194

Other comprehensive income (loss) ("OCI"), net of tax:

Foreign currency translation adjustment

(30,648)

134

1

19

(30,647)

153

Pension plans and other postretirement benefits

1,827

734

—

—

1,827

734

Unrecognized loss on derivatives:

Net change from periodic revaluation

(4,305)

(1,356)

—

—

(4,305)

(1,356)

Net amount reclassified to earnings

(137)

(664)

—

—

(137)

(664)

Net change in unrecognized loss on derivatives

(4,442)

(2,020)

—

—

(4,442)

(2,020)

OCI, net of tax

(33,263)

(1,152)

1

19

(33,262)

(1,133)

Comprehensive (loss) income

$

(119,627)

$

14,265

$

(230)

$

(204)

$

(119,857)

$

14,061

Six Months Ended March 31,

Matthews

Noncontrolling Interest

Total

2020

2019

2020

2019

2020

2019

Net (loss) income:

$

(96,830)

$

18,514

$

(71)

$

(336)

$

(96,901)

$

18,178

OCI, net of tax:

Foreign currency translation adjustment

(19,537)

(12,430)

(4)

6

(19,541)

(12,424)

Pension plans and other postretirement benefits

3,554

1,463

—

—

3,554

1,463

Unrecognized loss on derivatives:

Net change from periodic revaluation

(3,739)

(3,702)

—

—

(3,739)

(3,702)

Net amount reclassified to earnings

(412)

(1,219)

—

—

(412)

(1,219)

Net change in unrecognized loss on derivatives

(4,151)

(4,921)

—

—

(4,151)

(4,921)

OCI, net of tax

(20,134)

(15,888)

(4)

6

(20,138)

(15,882)

Comprehensive (loss) income

$

(116,964)

$

2,626

$

(75)

$

(330)

$

(117,039)

$

2,296

The accompanying notes are an integral part of these consolidated financial statements.

4

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

for the three and six months ended March 31, 2020 and 2019 (Unaudited)